Effective January 1, 2018, Assembly Bill (AB) 1008 amends the Fair Employment and Housing Act (FEHA) to restrict an employer’s ability to make hiring decisions based on a job applicant’s criminal conviction history.

Background

AB 1008 prohibits an employer from asking about criminal conviction history until the applicant has received a conditional offer of employment. After a conditional offer of employment has been made, an employer may conduct a
criminal conviction history background check. If the background check reveals that the applicant has one or more criminal convictions, then the employer must make an individualized assessment of whether the applicant’s criminal convictions have a direct and adverse relationship with the specific duties of the job the applicant is applying for.

If an employer wishes to rescind the conditional offer based solely or in part on the applicant’s criminal conviction history, the employer must inform the applicant of its preliminary decision in writing and allow the applicant an opportunity to respond. An employer must consider the applicant’s response when making its final hiring decision. If an employer ultimately decides to rescind the conditional offer, the employer must inform the applicant of its decision in writing and inform the applicant of the right to appeal its decision and the process for doing so.

While there are limitations on the reach of AB 1008, it creates significant liability implications for employers covered by the bill as it allows applicants denied employment to sue under the FEHA and also, to recover the broad range of damages available under the FEHA, including compensatory damages, attorney’s fees, and costs.

Below is a brief FAQ that explains how the new law will be applied to public agencies.

Does AB 1008 Apply to K-12 School Districts, Charter Schools and Community College Districts?

No, it does not. Newly created Government Code section 12952 contains two important exceptions. Specifically, the new law does not apply to:

“[A] position for which a state or local agency is otherwise required by law to conduct a conviction history background check” (Gov. Code, § 12952 (d)(1)); or

“[A] position where an employer or agent thereof is required by any state, federal or local law to conduct criminal background checks for employment purposes or to restrict employment based on criminal history.” (Gov. Code, § 12952 (d)(4)).

The Education Code provides that applicants for all positions at a K-12 school district, charter school or community college district must undergo a criminal conviction history background check. The Education Code also restricts school employment based on criminal history. The applicable statutes support a conclusion that the new requirements imposed on employers by AB 1008 do not apply to K-12 school districts, charter schools or community college districts.

Does AB 1008 Apply to Local Government Agencies Such as Cities and Special Districts?

Yes, unless an exception covers the particular position the applicant is seeking. AB 1008 will generally apply to other local government agencies except in those cases where the agency is required to conduct a criminal conviction history background check or to restrict employment based on criminal history. For example, public safety and some health profession positions, which require criminal conviction history background checks, will be exempt from AB 1008. Local government employers should carefully assess which positions AB 1008 applies to and tailor their application materials for the individual requirements of each position.

Takeaways

Employers are not legally required to ask for criminal conviction history information on application materials. Rather, they are only legally required, in some circumstances, to conduct a criminal conviction history background check and/or to restrict employment prior to hiring an applicant. Employers that are covered by AB 1008 should remove questions regarding criminal conviction history from their applications, while those that are not may voluntarily choose to remove questions regarding criminal conviction history from their application materials.

Employers may be concerned that screening applicants for criminal convictions, even minor crimes and crimes from many years ago, may result in a discriminatory impact on minority groups such as African-American and Latino men. Therefore, employers not covered by AB 1008 that ask for criminal conviction history information on application materials may wish to make individualized assessments of an applicant’s prior convictions in order to ensure that the questions do not disproportionately screen out minority applicants.

For more information on AB 1008 or on job applicant screening in general, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter or download our Client News Brief App.

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

Governor Jerry Brown has signed three bills that significantly impact local agency obligations to the California Public Employees’ Retirement System (CalPERS) and impose penalties on employers running afoul of the law. Each of these bills will take effect on January 1, 2018.

Under Assembly Bill (AB) 1309, CalPERS may now fine employers for failure to report hiring and payroll information for CalPERS members working in retirement.

Existing law allows retired CalPERS members to return to employment with a CalPERS employer under certain limited conditions, without reinstatement from retirement. Generally, a retired member must wait 180 days following retirement before returning to work and may not accrue service credit or make contributions to CalPERS during post-retirement employment. Critically, a retired member must not work more than 960 hours per year, or their retirement allowance may be suspended and the member returned to active service.

AB 1309 adds teeth to current law requiring employers to timely enroll and report retired annuitant hiring and payroll data to CalPERS. Under AB 1309, CalPERS may assess employers a fee of $200 per month, per retired member, for failure to enroll a retired annuitant in the CalPERS administrative system within 30 days of hire. AB 1309 authorizes a separate fine of $200 per month, per retired member, for failure to report monthly payroll data-including pay rate and number of hours worked-for retired members.

AB 1309 makes clear that employers must timely enroll and report data for CalPERS members employed during retirement. Employers may wish to consult legal counsel when considering employment of a retired annuitant, as law in this area is nuanced and small missteps may prove costly.

Assembly Bill 1487: New Limits on Out-of-Class Appointments

Local public agency and school employers sometimes bump an employee to a higher classification on a temporary basis to fill a vacant position while seeking a permanent replacement. AB 1487 places new limits on these temporary out-of-class appointments. Under AB 1487, employers may not place an employee in an upgraded position or higher classification for more than 960 hours in one fiscal year before filling a temporarily vacant position. Employers must also track and annually report to CalPERS the hours worked by all employees in such out-of-class positions. Employers violating these rules may incur stiff penalties including administrative fees and fines equivalent to three times the amount of both the employer and employee contributions on the difference between the compensation paid for the out-of-class appointment and the compensation paid and reported to the system for the member’s permanent position. The law prohibits the employer from passing any of the fees or penalties on to the employee.

Under current law, employers may retain employees in out-of-class appointments indefinitely. With AB 1487, the Legislature increases pressure on employers to timely and permanently fill vacancies, while curbing perceived abuses by some employers who use temporary out-of-class appointments as a mechanism to avoid higher pension liability. AB 1487 does not apply to vacancies created by employee leaves of absence.

Senate Bill 525: CalPERS Performs Annual Housekeeping

With Senate Bill (SB) 525, CalPERS makes a series of clarifying changes to the law. Although most of the bill’s provisions are technical housekeeping amendments, two changes are significant for employers. First, SB 525 authorizes CalPERS members who are school employees performing creditable service as defined by the Education Code, and who should have been enrolled by their employers in the State Teachers Retirement System (CalSTRS), to continue accruing service in CalPERS or make a one-time election to transfer to CalSTRS. These provisions allowing a transfer of accumulated service credit to CalSTRS may be particularly important to employers that mistakenly enrolled employees into CalPERS when those employees should have been enrolled into CalSTRS. In particular, school districts may want to review the retirement system enrollment of their employees in their preschool and early childhood education programs. Any election to transfer service from CalPERS to CalSTRS must be made prior to June 30, 2018.

Second, SB 525 clarifies that public employers must report special compensation separately from an employee’s pay rate. Existing law defines “compensation earnable” by a member, excluding new members subject to the California Public Employees’ Pension Reform Act (PEPRA), to mean the pay rate and special compensation, as defined, of the member. Special compensation includes a payment received for special skills, knowledge, abilities, work assignment, workdays or hours, or other work conditions. The law requires special compensation to be for services rendered during normal working hours, and the employer, when reporting this information to CalPERS, is required to identify the pay period in which the special compensation was earned. SB 525 requires the employer, when reporting special compensation to the board, to identify each item of special compensation and the category under which that item is listed, as described in regulations promulgated by CalPERS, and to report each item of special compensation separately from pay rate.

For more information on these new laws or on pension laws in general, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter or download our Client News Brief App.

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

School districts’ part-time playground positions will join the classified service when Assembly Bill (AB) 670 becomes effective on January 1, 2018.

Under the new law, part-time playground positions, including noon-duty aides, yard aides, noon-time assistants, and playground aides, will no longer be exempt from the classified service. The law will only apply to school districts that have not incorporated a merit system.

Status: Playground employees will no longer be considered “at-will,” but instead will have a probationary employment period and gain permanency like other classified employees.

Termination: These employees are now entitled to due process in termination proceedings consistent with the Education Code and school district policy.

Seniority: Employers will need to determine the date to be considered the first day in probationary status and to properly establish seniority dates for these employees.

Layoff and Reemployment Rights: Employees will be entitled to all statutory rights related to layoff and reemployment.

Leave Rights: Employees are entitled to all rights of classified service as provided by law including leaves, vacation pay and holidays.

The inclusion of part-time playground positions in classified service does not automatically result in these positions becoming part of a classified bargaining unit. A union may need to seek a unit modification to include these positions with the bargaining unit depending on the existing language of the school district’s classified collective bargaining agreement. The unit modification process will provide school district employers with the opportunity to negotiate the conditions of employment for these positions. School districts should review the language of their collective bargaining agreements to determine the status of part-time playground positions in the bargaining unit.

School districts should analyze the impact of these changes on health benefits and the applicable rights to these benefits by law and any applicable collective bargaining agreement. Districts should also examine what additional rights employees will be entitled to under the collective bargaining agreement to anticipate whether there are any items to be negotiated specific to these positions.

For more information on AB 670 or its impacts on classified service, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter or download our Client News Brief App.

Written by:

Megan Macy

Partner

Janae D Lopes

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

Assembly Bill (AB) 1651 adds a new hurdle community college districts must clear before placing an academic employee on paid administrative leave. AB 1651 specifies new requirements for placing academic employees on paid administrative leave, including two days’ advance notice of such a placement unless an exception applies. The bill becomes effective January 1, 2018.

Academic employees are individuals employed by a community college district in academic positions that require minimum qualifications.

Under existing law, community college districts generally have discretion to place an academic employee on paid administrative leave without advance notice. AB 1651 adds Education Code section 87623, which requires community college districts to notify academic employees in writing about the general nature of the allegations of misconduct at least two business days before placing them on paid administrative leave. This requirement will not apply if there is a “serious risk of physical danger or other necessity arising from the specific allegations.” If this limited exception applies, then the employer may immediately place the employee on paid administrative leave. Within five business days of placing an academic employee on paid administrative leave without advance notice, the community college district must notify the employee of the general nature of the allegations made against him or her.

This new law also addresses time limits for completing an investigation into alleged misconduct and for initiating disciplinary proceedings. AB 1651 provides that a community college district should complete its investigation and initiate disciplinary proceedings or reinstate the employee within 90 days of placing the employee on paid administrative leave. Because the statute uses the word “should” instead of “shall,” this appears to be a recommendation as opposed to a mandatory time limit. However, AB 1651 allows the California Community Colleges’ Board of Governors to specify by regulation a required amount of time in which a community college district is expected to comply with investigating and initiating disciplinary proceedings. This means that a required time limit for complying with this portion may be forthcoming.

AB 1651 also makes clear that its requirements do not supersede the rights of labor organizations or employees under the Educational Employment Relations Act.

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

Employers, including public agency employers, will be forbidden from asking job applicants for their salary history when Assembly Bill (AB) 168 becomes effective on January 1, 2018.

AB 168 explicitly prohibits public agency employers from asking job applicants for salary history information. However, when an applicant voluntarily and without prompting provides salary history information, employers may use the information as a factor in determining salary if the employer’s decision is supported by a bona fide factor other than sex, race, or ethnicity. Further, if the applicant’s prior salary history information is subject to public disclosure pursuant to federal or state law, employers may independently obtain the public information and use it as a factor in determining salary if the employer’s decision is supported by a bona fide factor other than sex, race, or ethnicity.

AB 168 also requires employers to provide a pay scale for an open position upon an applicant’s “reasonable request.” Employers that violate AB 168 are subject to monetary civil penalties under the Private Attorneys General Act.

The bill’s supporters argue that eliminating the practice of asking for salary history information will equalize pay for women and people of color. They claim that basing wages on market value instead of salary history will eradicate pay inequality.

Critics of AB 168 say the new law is gratuitous because there are already protections in place to prevent wage discrimination. For example, California Labor Code section 1197.5 prohibits an employer from using an applicant’s salary history, by itself, to justify a pay disparity. They argue that there are often legitimate reasons to ask about salary history, including unavailability of information regarding the market value for a newly created position. The new law may expose employers to litigation by creating another reason for applicants to sue prospective employers.

The availability of public agency salary information and the uniformity of wages paid to similarly situated workers may blunt the impact of AB 168 on the process of hiring rank-and-file employees and may minimize the need to ask applicants for salary history information. For school districts, the uniform salary schedule rule provides a rigid benchmark for certificated salaries that are paid uniformly based on an employee’s education and years of experience. Classified employee salary schedules are similarly uniform in nature. Applicants for both certificated and classified positions are placed on the salary schedules based upon standard criteria.

AB 168 will likely have a greater impact on the negotiation of salaries for management position applicants, because public employers are now required to produce a salary range for open positions upon request and cannot place new hires within the range based solely upon the applicant’s prior salary level. As a result, public employers may not have as much room to negotiate.

Takeaways

Public employers should ensure that their standard application forms do not include a request for prior salary information. Further, public employers should train employees who interview prospective employees to refrain from asking applicants about their salary history.

For more information about AB 168 or on hiring practices in general, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter or download our Client News Brief App.

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

On September 28, 2017, the United States Supreme Court agreed to review the Illinois case Janus v. AFSCME, Council 31, which challenges the constitutionality of “fair share” or “agency” fees collected by unions. A decision in the case is anticipated by June 2018.

Janus challenges the constitutionality of fair share fees (a.k.a. agency fees) under Illinois law. Specifically, the Illinois Public Relations Act allows unions to collect fair share fees from non-union member employees on whose behalf the union also negotiates to cover the costs of negotiating and administering the contract. This law is similar to California law, which allows unions to collect a fair share fee from bargaining unit members who choose not to join the union.

In Janus, the plaintiff, a state-employed child support specialist, challenged the mandatory payment of fair share fees, claiming such arrangements are unconstitutional under the First Amendment.Janus claims that the fees support a mandatory advocacy group whose speech is designed to influence governmental policies in excess of employees’ actual support for the advocacy group and its agenda. The plaintiff seeks to overturn a 40-year old ruling inAbood v. Detroit in which the Court ruled that it was constitutional to require all employees to pay to support the cost of bargaining, so long as the fees paid by the workers are not used to cover the cost of political or ideological activities.

If the Supreme Court overturns the Abood ruling and finds that fair share fees or agency fees violate constitutional rights to free speech and association, employees would no longer be required to pay anything if they decline membership in the union. Proponents of the Abood ruling argue that without such fees, non-members reap the benefits of the union by using their services without bearing the cost.

The Janus case is not the first time that the Abood ruling has been challenged.Friedrichs v. California Teachers Association, a case involving California teachers, was on the brink of overturning the Abood ruling. The death of Justice Antonin Scalia in February 2015 left the Supreme Court without a ninth vote, and the Court split 4-4 when it decided the Friedrichs case. The appointment of Neil Gorsuch to the Supreme Court may provide the fifth vote needed to overturn theAbood case and to find mandatory fair share fees to be unconstitutional.

In addition to the Janus case under review by the Supreme Court, a case currently pending in a federal district court in California challenges fair share fees. That case,Yohn et al. v. California Teachers Association et al. (C.D. Cal., Case No. 8:17-cv-00202-JLS-DFM), in which Lozano Smith represents several involved school districts, claims that these fees violate the First Amendment’s individual speech rights. There was an unsuccessful attempt to fast-track Yohn to the Supreme Court to be considered with theJanus case. Thus, while the Yohn case is still pending, it is possible that the ruling in Janus will be dispositive of the major issues.

The Supreme Court’s agreement to review the Janus case does not impose any new obligations on public employers with respect to mandatory fair share fees. Rather, existing collective bargaining agreement provisions on fair share fees will remain in effect until a decision is issued by the Court.

Lozano Smith will be watching this case closely and will provide updates as they become available. For more information on the Janus case or on union dues in general, please contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter or download our Client News Brief App.

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

The Trump Administration has issued a significant rollback of Affordable Care Act (ACA) rules that require employers to include cost-free contraceptive coverage in health insurance plans offered to employees. The changes, however, do not apply to most government agency employers and will have a limited impact on California employers. California is one of four states with laws that mandate contraceptive coverage in employer-offered health insurance plans.

The new federal interim rules, which were issued on October 6, 2017 and became effective immediately, permit all non-governmental employers, health plans and third party administrators, as well as colleges and universities that provide student health insurance, to seek an exemption from the requirement that they provide contraceptive coverage if doing so violates a “sincerely held” religious belief. Employers may invoke the exemption to avoid covering some or all of the Food and Drug Administration (FDA)-approved contraceptive services health plans are required to cover under the ACA.

The interim rules also extend the contraceptive coverage exemption to nonprofit organizations, for-profit entities that have no publicly traded ownership interests, health insurance issuers and colleges and universities if providing such coverage would violate a “sincerely held” moral conviction. While not included in the federal interim rule, the Administration is seeking comments on whether this contraceptive coverage exemption should be expanded to cover publicly traded corporations and non-federal government plan sponsors.

The interim rules also permit employees who do not want contraceptive coverage due to their religious beliefs or moral convictions to ask their employer to provide alternative health coverage that does not include coverage for contraceptives. The new rules permit any willing insurer or employer, including government agency employers, to provide such alternative coverage.

Prior ACA rules only permitted houses of worship and integrated auxiliary institutions to exempt themselves from the contraceptive mandate. Those rules created an accommodation for other nonprofit religious organizations and closely held corporations that objected to providing such coverage for religious reasons that required insurers to continue to provide contraceptive coverage without cost and also established mechanisms for repayment. The prior federal accommodation is now optional for employers who are eligible for an exemption on religious or moral grounds.

While the new federal rules may reduce access to contraceptives across most of the country, they will have little impact in California, which requires most employers to provide contraceptive coverage at no cost to insured employees.

California’s Contraceptive Coverage Equity Act of 2014 (the Act) requires health plans and insurers doing business in California, including Medi-Cal managed care plans, to cover FDA-approved contraceptive drugs, devices and products for women, as well as related counseling and follow-up services and voluntary sterilization procedures, without cost. This California law applies to health care service plan contracts and health insurance policies issued, amended or renewed on or after January 1, 2016.

The Act exempts religious employers, defined as a house of worship or integrated auxiliary institution for which (1) the inculcation of religious values is the purpose of the entity; (2) the entity primarily employs persons who share the religious tenets of the entity; (3) the entity serves primarily persons who share the religious tenets of the entity; and (4) the entity maintains nonprofit status. The Act does not apply to grandfathered health plans.

The Act does not address the interim federal provision that allows certain employees to request alternate health benefits without contraceptive coverage, and based upon current law, it is unclear whether government agency employers may consider such requests.

The federal interim rules regarding contraceptive coverage are temporary and are subject to a comment period that is open through December 5, 2017. The interim rules on religious belief exemptions may be viewed here, and the interim rules on accommodations and exemptions for moral convictions may be viewed here.

For more information on the federal government’s interim contraceptive coverage rules, state coverage rules or health care coverage in general, contact the authors of this Client News Brief or an attorney at one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter or download our Client News Brief App.
Written by:

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.